What are some of the best practices for raising funds? How to go about finding a partner? AdaPia d’Errico shares her experience with us, she is a principal and VP of strategy at Alpha Investing, a real estate private equity firm that offers multifamily, senior housing, and affordable housing commercial real estate opportunities to their network of private capital investors.
What are some of your best practices for raising funds?
The best practice is going to be to be a genuine person, I often use the word authentic. Even though that can be a bit of a strange word, what I really mean by authenticity is being genuine, being a real person. And a lot of that comes with humility. And for me personally, that means being myself, there's always this expectation that somebody should have all the answers and be an expert and be able to make guarantees, which of course we know, in any kind of investing is just not something you want to do. You can't make guarantees.
And I think a real best practice is to take the time to get to know somebody and to be a real person when you're knowing them, not like an old 1980s style of sales. Simply, this is who I am. This is this is my background. This is what we do in a really specific scenario. For example, this was our worst deal. This is what went wrong. This is what we learned from it. Because we get things wrong. I'm not going to sit here and tell you that every project that we've invested in has knocked it out of the park, including senior living, we've had a couple that aren't performing to pro forma. Why did that happen? What's going on? Those are important things for investors to understand and to know. Especially having conversations with people, there's a lot to be said for automating the process, for letting people almost be without needing to talk to you. And you can do a lot of that for sure. But there is something to be said about taking some time to have phone calls with people.
We always require an initial phone call to really understand who would like to work with us, because we are referral and recommendation based. We're very highly selective even with our investors. And that's important to us, because having the right kind of investors allows us to bring better investments. Building those relationships with those investors helps a lot because they need to know that they can ask me a question. Because if they can't ask me a question, then it means that I can't help them earn trust, if they can't ask a question, they might not invest, and they might miss out on an opportunity. So those are really important things, just running people all the time through a chat bot, or Zendesk or something like that, while it is potentially more efficient, it's not as effective as just picking up the phone or spending some time giving bespoke answers, especially in real estate, especially on the equity side, right? It's there's complicated things to talk about. And there's, there's a lot of moving parts to be able to explain to somebody.
What's important for fundraising is really being holistic in your approach to an investor, being a real, genuine person and being willing to speak about the things that went wrong and not trying to put on a facade of expert, or perfection, or we're the best, nobody's going to believe you.
Even in the tech world, when VCs are asking a potential startup questions, it's a known fact that if they have all the answers, they don't know. It's definitely an important thing to say the things that you do not know, and that you're going to get back to them on that.
When you run a firm that cares about its investors, our numbers on conversion, and retention are unheard of, our repeat investment rate is 80%. Our conversion is 40%, from leads that have come in from referral and recommendations. There's 50%, open rate on our email, our monthly marketing email, our newsletter. But because all of us from the four principals that are there, we really try our best to make ourselves available, and to be approachable, and authentic. Those are my three A's for being a good capital raiser.
I want to talk about being a woman as you are raising funds, because people do sometimes treat us differently, and that's okay. And it's part of the game. But how have you approached that? Do you experience that a lot? Not a lot?
In my life, in my career, I haven't really experienced a lot, I have experienced some because it's embedded, unfortunately, and I think we're going to start seeing a lot of changes there. But, inappropriate remarks that, made us jokes, I think it comes from people really not understanding, I haven't had any really big severe problems in that sense. And I don't know if that stems from the fact that I just don't have never thought of myself as different than a man. I show up to work, I show up to what I do as, as myself, I don't even think about me as a woman being different or less than a man. It's embedded, but I have never adopted that as any part of my identity. So I've never really had issues with that.
I think when it comes to fundraising, I probably have a very different approach, because I have a pretty good grasp of my soft skills, and my wanting to relate, and my willingness to relate. And that has to be matched with a good amount of, I would say, technical knowledge, which isn't my forte. And I'm going to be totally honest about that. And if I don't know how to answer something, then I will say, I don't know how to answer that right now. But I will get you the answer. There are things that we have to balance the affability with some knowledge, of course, so that's really important. I just like to relate to people. And I think that fundamentally it's about trust and a transference of trust. The trust in me transfers to my firm, and I think that's why I will always revert back to that being genuine and, being a real person.
And maybe some people want to have a more technical conversation. And I've certainly had investors who are very technical, and usually what I'll do is, I'll bring on one of my partners that has far more details. I'll bring one of the original founders on, Fark, our CEO, he's like a living ledger of deals, it's incredible. I can never do that. So that's really important. I don't think I've ever really been disrespected by an investor ever, or even by gender. So I think I would just have to approach that in a really direct way, if something came up and probably just have a conversation and say, I didn't appreciate that or do you realize that that's how that came across? Luckily, I haven't had to do that.
Let's chat about your book, you literally just launched this book, and I'm also super curious about how you found a partner. So a couple of questions in this question.
My book is called Productive Intuition. And it's essentially everything that I've learned about integrating what amounts to a spiritual awakening over the past few years, and integrating that into the life that I lead today. As a high functioning executive, as somebody with a mortgage, or somebody with a husband, sometimes I think that, anyone who goes through a really challenging period that causes you to question fundamentally who you are, because that's what you know, that's what it is. That's when awakening is where you're questioning everything about your life and your identity, because something really fundamentally shifted inside.
You could say COVID caused the world to wake up as well in certain ways, right? We questioned everything that was our life. For me, when I was going through it, it was very much related to my career and my identity that I held at the time. And I really learned through my own research and my own experiences, the principles that landed me on this sense of inner authority, and how powerful our intuition is and how much I was suppressing it. And I think a lot of people do, and they don't understand that they're using it, and that it's a skill, it's a real thing. And it doesn't have to be this woowoo mystical thing. It's actually biological, it's built into our biology. I speak to so many people, obviously, in the real estate space, other investors and operators, and they will say that they work with their gut all the time.
They get a sense of a good partner or a bad partner, or a deal or a building. And that comes from a variety of things. It's maybe cognitive, it's experienced based. A really experienced person can look at a situation or let's say they're looking at an opportunity, an investment, and because of their built in experience from years and years and years, they can have a flash yes or no. And they'll sense it, and they know it.
And then there's other things like having a gut feeling about people, there's a lot of moving parts to how it works, but the book really is about finding an anchoring to inner authority. In a world that has really taught us to give our power away to someone or something outside of ourselves, some external authority, some institution, something outside of us, when in reality, we have all that power within and to make a decision, and to actually use all of our faculties, all of our senses and very much our intuition to help us make better decisions. That's what the book is about.
A lot of people have been reading it and they can relate to it because it's not a spiritual book. I wrote it for people like me, I wrote it for people who still identify and want to be in the world, you don't have to go be a monk, you can have your life. Even finding my partners at Alpha Investing was a function of when my whole life broke down, I had to get super clear on who am I, and what do I want. I just wanted great business partners, and I manifested them. I have been in the most amazing partnership with them for the past three years. That to me is proof positive that when we are really anchored into our values, our personal values, who I am, what I want, and we know how to set boundaries, we know how to tell if somebody or something feels good or doesn't, we can make better decisions and they are a prime example of that decision.
Talking about manifesting a partner, how did you go about manifesting that?
It's going to sound like The Secret. I was at this place in my life where nothing was working. I had left the crowdfunding firm, I had been doing some consulting for a while, which was great. And then I felt like I wanted to do something more creative. There was a part of me that was like, AdaPia, you're a writer, you love to write. So I started a blog,
I started a podcast at the time, and I thought maybe I can be a solopreneur. And I really wanted to also help women. We didn't talk about this, but I'm really passionate about sharing my experience with other women to help them and so this was all happening around 2017 when the Me Too movement started. And I thought, this really powerful, strong, independent, successful woman I have been for years, I need to go and do something more. So I was doing leadership workshops and things like that. But something about it wasn't working. And that was this, this awakening that was just asking me to stop. Because I was also very much burnt out from all those years, doing all the crowdfunding stuff. And that was heavy work, that was venture backed, it was startup, you know, it's a lot. It took its toll.
I found myself in this rock bottom place where I couldn't make anything work. And I wasn't making money, which was freaking me out because I had a mortgage, I was like, This is not possible, I can't be doing this. And I had a moment where I basically got really angry at God, or the universe. And I said, I'm not okay with this. And I was shaking my fist, I was so angry. And I said out loud, and it came out of nowhere, because I wasn't thinking it. But I said, I don't want to do this alone, all I want is good partners who want me for who I am, for what I can do, they want me to be me. They don't want me to be a silver bullet. They don't want me to run some fancy marketing campaigns, all this stuff that I knew didn't work and didn't align with me.
So I made this declaration, which surprised me. I thought I was supposed to be successful doing these other things that I was passionate about. And three days later, Fark called. I knew Fark and Alpha for a couple years, because I was informally advising them. So it wasn't totally out of the blue. But what was out of the blue is that they called to ask if I would join as a partner. And that's why I was laughing because it is like The Secret.
I better do some screaming today. And do some complaining for sure.
I'm was thinking, Why do I always have to be brought down to my knees before I just ask for what I wanted? That's how it happened, and it's hilarious, and it's amazing. What's important about it is that I had to get so clear on who I was, what I wanted, and what I was willing to do and not do. So the alignment with Fark and Dan and Alpha was that they had the same ideas and thoughts around marketing and Investor Relations and capital raising that I did. That's what allowed us to come together and say okay, we can do this. It's been three years of incredible growth and we find ourselves today, even with the pandemic, probably a few years ahead of where we thought we would be, our growth has been outrageous and amazing. But I don't feel burnt out. And I'm not stressed out, and I'm in such a good place. I'm so grateful.
Is there anything else that you think that our audience should know?
I kind of touched on it just now, is any amount of gratitude that you can bring into your life and everything that you do. And a sense of optimism, even when we might be fed a lot of things that are saying that things are really bad, but to stay centered in your joy, in your gratitude for what you do have, and that joy is like a magnet. I put a lot of science in the book around this, but the electromagnetism of the body, and the heart. But if you can center in that place, you can manifest little miracles in your life and even big ones. And so that would be the last thing that I would leave people with. It's on the soft skill side of things, but I say it because I'm still here in a private equity firm as a partner doing what I do, and I love it. And I'm using all my soft skills every day. And I'm seeing a lot more people, men and women that are really owning that side of themselves. And they're being way more successful than they ever were, when they were maybe just grounded in left linear brain analytics, and so called expertise, and so called hierarchical authority. So we have an opportunity now, in this changed world, to be that person that we know we are and we actually want to be inside.
And it is proven over and over again, with meditation that it does change the energy around our body. So it's not woowoo, it's actual reality that can transform our lives.
AdaPia d’Errico
www.alphai.com
Productive Intuition: Connecting To The Subtle